NAME: WEH KHUMALO

STUDENT NO. 20197631

MODULE: HCRA03

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TABLE OF CONTENT

Page 1……………………………………………………………. COVER

Page 2………………………………………………………………Table of content

Page 3……………………………………………………………… Introduction

Cyber Crime

Page 3-7………………………………………………………………… Cyber crime

Page 7-8 ………………………………………………… Human resources fraud

Page 8 -9 ……………………………………………………. Tax fraud and tax evasion

Page 10-11 …………………………………………………………. Money laundering

Page 12 ………………………………………………………………… Conclusion

Page 13 …………………………………………………………………. References

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A comprehensive analysis on the role of inter-sectoral approach in detecting
and preventing economic crimes in SADC.

Introduction.

Economic crimes are often also referred to as white collar crimes. These are crimes
which are financially motivated, non-violent and committed by business and also
government officials. These are also characterized by deceit, concealment or
violation of trust. Economic crimes can also be committed against individuals and the
essay will discuss the examples such as tax evasion, money laundering, cyber-
attacks, human resource fraud and intellectual property invasion to mention the
least. The essay will also discuss approaches or methods that can be used to detect
or prevent economic crimes. Organizations can collaborate to prevent economic
crime, like the criminal justice system, cyber security systems, cyber forensics and
also security groups to mention a few, play a key role in detecting and preventing
such crimes from happening in various ways as they work as a collective team which
makes it easier to detect and prevent economic crimes. Economic crimes are ever
rising in Southern African countries but nonetheless there are inter-sectoral
approaches which are being implemented in order to detect and prevent these

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crimes from happening, not only these objectives but also to enhance economic
growth.

Cyber Security.

In today’s world there are crimes which occur through the internet or the use of a
computerized device without posing any harm to people and these are called cyber
crimes. Due to this, there is development of cyber securities which play a role in
preventing and detecting such crimes and also this is carried out through computers
as well. According to Minnaar (2014) Cyber security refers to all organizational
actions required to ensure protection from online danger of attacks, threats and risk
to the security of information in all its digital electronic forms and the security of the
computer equipment, systems and networks where information is stored, accessed,
processed and transmitted. (Minnaar, 2014:137)

Cyber crime has thus given rise to crimes like fraud through hacking of individual or
a business sector’s banking details in Southern African- South Africa. According to
Cassim (2011) there is a notable number of fraud cases in the banking sector
recorded in South Africa. He states that cyber crime is increasing rapidly whereby
The South African Banking sector and software security companies have expressed
concern about the increase in “phishing schemes” – the most common type of online
fraud which involves the online theft of internet user’s identities. He reports that
according to The South African Banking Risk Information Centre, phishing schemes
have trebled since 2011 and cyber criminals have become quite crafty and
sophisticated, targeting clients of multiple banks simultaneously increasing the
perpetrator’s chances of success. (Cassim, 2011:130)

Cassim (2011) also states that fraudulent waves do not only attack individuals but
they also attack government departments. He reports about a fraud case which
happened in recent years, where suspected cyber hackers stole R5.5 Million from
the bank account of the Mpumalanga Education Department presumably with the
help from the inside. This was then discovered when the department’s bank clerk
noticed that huge amounts that were paid into a woman’s account did not fit her
financial profile at the bank. Also hackers work on intercepting bank SMSs to their
customers and it is reported that R7 Million was siphoned off customers’ account as

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a result of the scam and these raised concerns on the security of the online banking
methods.

This is where a collective integrated organization of cyber security comes in as to

show how they can predict and prevent such crimes from occurring. According to
Cassim (2011) the establishment of organization such as The South African Banking
Risk Information Centre (SABRIC) to combat cyber crime in the banking industry is a
positive move. The South African Banking Risk Information helps detect or prevent
crime by providing the bank industry with crime risk information management
services and facilitates inter-bank activities to reduce the risk of organized bank-
related crimes, through effective public private partnership. (Cassim, 2011:131)

Furthermore, Cassim (2011) reports that the police collaborate with banks and the IT
industry via SABRIC to combat cyber crime and bring cyber crime to book. It is
submitted that the private sector has vested interest in addressing bank related
crimes therefore such public-private partnerships are necessary in the fight against
cybercrimes like fraud. (Cassim, 2011:131)

Still on cyber security, according to Minnaar (2014) cyber crimes like fraud and
money laundering happen more often through the internet in nowadays. He reports
that a key suspect of computer related crime is the malicious tampering with
computer data by disgruntled or dishonest employees, so-called “insiders” These so-
called insiders are the ones that are capable of entering a virus into the company’s
system and spread it through a retail chain group of stores or business for instance,
thereby damaging the company’s computer network. Other attacks on company’s
information systems could include deleting company address books or client lists
and this eventually leads to economic consequences because the whole data base
containing sensitive customer information are also stolen for example banking details
leading to fraud and access to their banks. (Minnaar, 2014:136)

In order to prevent such crimes from occurring, companies need to interact with
cyber security experts. Install software that will monitor employees’ movement,
actively look for suspicious activity. Also organizations also should at the very least
establish a full inventory of who has access to network systems and database at all
levels and implements a strong vetting process for new employees and contractors.
By so doing it is therefore virtually significant that a range of information technology

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systems be put in place to track the electronic movement of each and every
employee thus keeping a watchful eye on their activities on the internet. (Minnaar,
2014:137)

Cyber security also plays a role in detecting and preventing cyber crimes from
occurring. According to Minnaar (2014) who reports that cyber security includes
counter measures against all kinds of attacks. Some preventative measures include
information protection software or intrusion protection systems (IPS, pre-emptive
blocks, passive and active intelligence which includes law enforcement employed to
detect cyber threats or actions temporarily isolate a system engaged in hostile cyber-
activities. Also detecting and preventing cyber crimes can be done through
implementing application white listing which is the opposite of blacklisting –by
creating a list of approved programs for running on all networked devices therefore
this will prevent malicious software, malware and other non-approved programs from
running in their network systems. (Minnaar, 2014:138)

Also other methods used to detect cyber crimes are regular network installation of
“patches” to applications, applications such as banking applications found in smart
phones and also application which offer purchase of goods online and these patches
are used to fix programs and update computer system to prevent bugs or viruses
through patching applications, operating systems and web browsers. This helps
individuals or business sectors in detecting and preventing cyber crimes because
patches are routinely provided by software developers for secure running of their
programs. (Minnaar, 2014: 138)

In Southern Africa, the legislation or law enforcers also play a role in the prevention
of cyber crimes. In Botswana, according to Cassim (2011), The Cyber Crime and
Computer Related Crimes Act 22 of 2007 was passed in December 2007 with the
aim of combating cyber and computer related crimes, to counteract criminal actions
perpetrated through computer systems. Also Zambia introduced the National Policy
Framework on Cyber Crime, which criminalizes cyber security criminal activities and
computer offences. The Global Cyber Security Agenda (GCA) was launched by the
International Telecommunication Union in May 2007 to coordinate cyber security
challenges. Such activities by the legislation help develop security and facilitate the
collection of electronic evidence. (Cassim, 2011: 134; 135)

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The government also has a role to play in prevent or detect economic crimes.
According to Herselman and Warren (2004), In South Africa during Thabo Mbeki’s
tenure as president in 2002, the Electronic Communications Transaction (ECT) Act
was passed to prevent and combat the rise of cyber crime in South Africa, stopping
crimes with economic effect be it the business sectors or an individual. This Act
mainly protected companies or individuals from theft, interception or interference of
information, fraud, forgery, extortion aiding and abetting cyber crimes. With this act
being passed, it was obviously followed by penalties for contravening the Act there
by so doing the government and the legislation play a role in preventing such
economic crimes. (Herselman & Warren, 2004:256; 257)

According to Grobler, Vuuren & Zaaiman (2013), in their article they state that there
is immense need for cyber defense collaboration. They state that it is necessary for
organizations to collaborate in cyber defense. Towards the end of 2009, the South
African Government passed two bills namely PPI (Protection of Personal
Information) Bill that introduces brand new legislation to ensure that the personal
information of individuals is protected, regardless of whether it is processed by public
or private bodies (Giles, 2010) and Information Bill that was meant to replace an
existing piece of legislation, the Protection of Information Act of 1982. It meant that
there was going to be protection of the State’s information from suspected hostile
activities. By so doing these bills passed helped with the protection of individuals’
information and the State’s that could promote economic crimes such as money
laundering. (Grobler, Vuuren & Zaaiman, 2013:35)

Furthermore, the Information Technology (IT) sector should collaborate also with the
Criminal Justice System (CJS) in order to detect and prevent fraudulent crimes
which may not only affect one individual but also the economy. Signorato (2015),
states that the Information Technology services can help in investigating crimes
which are committed over the internet- cyber. He states that Information Technology
plays a major role in executing economic criminality. Every time we use the new
technologies we leave behind us some sort of “traces” that is the traffic and location
data on both legal entities and natural persons and to the related data necessary to
identify the subscriber or registered user. Such data can be extremely useful in the
context of criminal investigations. (Signorato, 2015)

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With the above information sighted, it is of great significance that cyber security is
implemented for both private and private organizations to detect and prevent
economic crime which occur through the aid of the internet.

Human Resource fraud.

Economic crimes are not only committed on the internet but also on other fields.
Poaching is also another criminality that has an effect on the economy. The illicit
procurement, transportation and distribution of commodities across the borders, has
seen a lot of crimes committed and these crimes cripple the economy. Poaching has
seen countries Zimbabwe with a fragile economy threatened due to its severity.
Zimbabwe is a country which is rich in wildlife. In 2003 it was reported that poachers
from Somalia invaded in such countries to poach for Ivory and due to poor security
within the borderlines such crime are inevitable. However the government and the
Zimbabwe Parks and Wildlife Management Authority should collaborate to prevent
poaching. This can be done by improving security services inform of CCTVs within
the boundaries of the parks and also keeping record of all the incomings and
outgoings of animals from each park. Also, providing strong monitoring at the
borderlines to monitor the Wildlife department. (Clark, 2003)

Clark (2003) also reports on the emerging of transitional crime which have an effect
on the economy inform of large-scale theft of natural resources including wildlife,
timber, gold and diamonds. This is a crime which does not only include individuals
but it also involves units and organized crime syndicates (Venter, 2003). This form of
crime is widespread that threatened economic stability of countries in the Southern
countries and even globally. For example Zambia at that time Zambia lost more than
U.S $10 million from the poaching of its elephant population and another U.S $200
million annually from the legal emerald, according to Ndhlovu (2003).

The poaching and trafficking of endangered wildlife is one aspect of natural resource
theft which has a negative effect on the economic stability. This includes
unsanctioned international trafficking of wildlife and their parts. Extensive cross-
border of wildlife and poaching has a toll on economic development of countries and
leads to economic fragility. However several inter-sectoral approaches have been
implemented in order to curb or prevent such economic criminality. For instance,
according to Snyman & Hauck (2001), in South Africa provincial law is a key

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component of the effort to regulate wildlife trade, helping in keeping record of all
imports and exports of animals and their wealthy parts in all provinces. Henceforth
such regulatory measurements appear to be a positive move towards preventing
economic criminality embarked via illicit trade. (Clack, 2003)

Another approach that can be used to prevent poaching is through military

appointment. According to Caputo (2002) efforts of preventing poaching can be done
through use of heavily armed anti-poaching units backed by helicopter gunship
aggressively pursuing poachers. More so, contemporary solutions to such economic
criminality involve strict penalties for poaching which protects wildlife population. For
instance the government of Zambia relies on approximately a five-year to ten-year
sentence for illegally hunting, wounding or killing rhinoceroses or elephants. The
government and the Integrated Rural Resources Development Project (IRRDP) work
together on this project by operating on the premises that any successful wildlife
conservation program that seeks to root out or curb poaching or illegal trade in wild
fauna. This can only be archived by involving the local people- the community, by
placing them in a management role for local wildlife. (Ndhlovu, 2003)

According to Caputo (2003) a similar project is in motion also in Zimbabwe which is

called Communal Areas Management Program for Indigenous Resources
(CAMPFIRE). Also Zimbabwe like Zambia relies on brutal punishment passed by
the legislation. Illegal hunting stock-theft and wounding of wildlife sees a punishment
of eight to ten years imprisonment By so doing these are efforts by the Criminal
Justice system to prevent economic criminality because illegal trafficking of these
animals lead to economic instability because animals like elephants and rhinos
produce ivory therefore loss of ivory has a negative effect on the economy. (Clack,
2003)

Tax fraud and tax evasion.

Furthermore, other economic crimes are in the form of tax fraud and tax evasion.
According to Shandu et al (2019) Tax fraud is defined as when a taxpayer
misappropriates tax deduction from other payments made to a creditor, such as non-
resident withholding tax, or where a person knowingly provides false returns
intending thereby evade payment or access of tax. Nyoni (2020), defines tax evasion
as an illegal practice to escape taxation whereby taxable income, profits liable to tax

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or other taxable activities are concealed and sources of income are misrepresented.
Tax evasion has negative implications on the economy as they hamper
governmental efficiency engaging in beneficial programs and result in an eroded tax
base which in turn widens the national budget deficit. (Nyoni, 2020)

Shandu (2019), also reports that in South Africa such a crime is committed through
the use of electronic filing (e-filing) which is a predominant method of tax evasion
Therefore, the collaboration of SARS and SAPS play a significant role in preventing
such crimes from happening .Recommendations are that, the South African Police
Service’s Directorate of Priority Crimes Investigations (DCPI) should call for the
improvement of SARS’ e-filling system in order to detect falsified information by
tracing history of applicants. Also investigators should closely look at current trends
to improve present investigation techniques. Also SARS should implement internal
investigations (of staff) to monitor the claim made before tax returns are paid out.
Also Zimbabwe Revenue Authority (ZIMRA) must combat tax evasion by keeping
record of all taxation under strong monitoring and also appointment of anti-corruption
team to monitor this department.(Shandu, 2019 & Nyoni, 2020).

Also, economic criminality comes in the form of intellectual property infringement.

Intellectual property infringement refers to any violation or breach of protected
intellectual property rights (lexology, 2019). In Zimbabwe for instance, property
infringement has been on top of the radar whereby those in power take advantage
and take property like mines and make them their own, for their own benefit. Gold is
essential in the stabilization of the economy of Zimbabwe. Corruption in Zimbabwe
has always been a focal point in the economic instability. According to the
International Crisis Group (ICG), (2020) politicians engage in such malicious acts,
particularly members of the Zimbabwe African National Patriotic Front (ZANU-PF)
have been fingered as “patrons” of illegally encroaching artisanal miners. They even
mobilize machete gangs against rivals. As long as these politicians do it for their own
benefit not the country, this becomes economic criminality. (International Crisis
Group, 2020:2)

Furthermore, intellectual property infringement is a crime which has a huge effect on

the economy. Zimbabwe for instance, saw their economy drastically collapse in the
years between 2006 & 2009. This was due to the acts of the former president of

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Zimbabwe Robert Mugabe and the army launched a brutal and violent movement
towards people working at the Marange Diamond mine as he was on a quest to
cease it after its discovery in 2006. Such criminality went unpunished by the Criminal
Justice system as this movement saw a violation of Human Rights also. But the
effects of this could not be hidden as the economy of the country trembled down.
(Kasamba, 2021)

Having said the above, The Criminal Justice System of Zimbabwe as an organization
can play a role in preventing such criminality from happening. One of the methods
that can be used is sanctioning of offenders regardless of their status and also
appointment of anti-corruption team to deal with such criminals in order to conserve
the economic wealth and stability of the country.

Money Laundering

Money laundering is another crime which affects any country’s economy. Money
laundering is defined as a process that criminals use in an attempt to hide the illegal
sources of their income. This is done by passing their money through complex
transfers and transactions, through series of businesses that is cleaning the money
of its illegitimate origin and made to appear as legitimate business profits. Criminals
launder money in order to avoid massive income tax liabilities. Money laundering has
severe and extensive effects creating global and local impacts for businesses,
economies as well. Money laundering damages financial sector institutions that are
critical for economic growth, promoting crime and corruption that slow economic
growth and also reducing efficiency in the real sector of the economy.

However there are several approaches that can detect or prevent such a crime from
happening. According to Goredema (2004), the commitment of Southern African
government in combating money laundering implies political will. He writes about
methods like the integration model which is quicker and efficient to dispose of
suspicious transactions and to freeze assets if a single authority is responsible for all
action. It is further urged that integrated system creates a credible intermediary
between law enforcement and financial institutions like financial intelligence unit
which is responsible for building a climate of trust between them and minimizes the
risk of putting innocent people under police investigations or economic espionage by
business rivals. (Goredema, 2004:6; 7).

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More so, Goredema speaks about another approach that can help detect and
prevent money laundering. He speaks about the fragmented approach which is
based on the notion that data related to money laundering activity is accessed by the
formal sector through multiple points, each empowered to combat such activity when
detected without necessarily deferring to a central authority. This approach perceives
functional compartmentalization and efficiency. (Goredema, 2004;6)

According to Koker (2002) laundering compliance systems can also help in

preventing and detecting money laundering. South Africa for instance has a strict
exchange control regime. The South African financial community is therefore
accustomed to pay particular attention to international transactions with a view to
determine their compliance with exchange control regulations therefore making
South Africa less attractive for foreign criminals. (Koker, 2002:19).

The gambling industry is a perfect example of an industry that is a hotspot for money
laundering. Provincial gaming laws, for instance, prohibit certain cash transactions
by casinos, compelling casinos to identify certain clients with excessive amounts
transactions. Koker also identifies The JSE securities exchange for stockbrokers
who are required to identify their clients to verify prescribed particulars. Also the
banks are guided by the common to identify and verify clients who wish to open bank
accounts. This is under the regulation passed by The Bank Act. Also Koker speaks
on other organizations which help in combating money laundering such as the
Financial Intelligence Centre which helps in detecting crime through identification of
the proceeds of unlawful activities and combating money laundering activities. He
speaks about The Money Laundering Advisory Council which gives advice to the
minister of finance on policies regarding the combating of money laundering
activities. (Koker, 2002: 23; 24)

Conclusion.

In conclusion, there are several ways that can be interacted to detect and prevent
economic crimes. The collaboration of different sectors has a massive contribution is
combating economic criminality such as money laundering which can be prevented
by applying the integration method, use of the Financial Intelligence Council. The
use cyber security also helps in monitoring the safety of internet crimes, like fraud,
cyber attacks, basically private and public entities. Also the above essay explains

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how human resource fraud like poaching and intellectual property infringement can
be prevented to save the economy through sanctioning of offenders and brutal
punishment.

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